Abstract: When employers observe imperfect measures of worker effort, theorists typically assume
that observed effort is unimodal and symmetrically distributed. Though observable effort may
be distributed in different ways within a work day, for example, available field data on these
effort distributions are rare. The symmetry assumption is largely untestable as a result. This
paper presents empirical data from two experimental work environments that question the
validity of such assumptions. For these piece-rate work environments the author finds that
observed effort is significantly negatively-skew (i.e., modal>mean effort). The author’s
hypothesis is that on-the-job leisure causes this skewness in observed effort distributions. There
are both theoretical and practical implications of this asymmetry. Some implications from the
theoretical agency literature that we discuss include: self-selection into rank-order tournaments, optimal wage spreads in rank-order tournaments, and optimal wage contracts with asymmetric information.

Additional Information

Publication

Dickinson, David L. (2006). On-the-Job Leisure as a Cause of Asymmetric Observed Effort Distributions. Managerial and Decision Economics, Special Issue: Experimental Economics, 27(6): 435-44. (ISSN: 1099-1468) DOI: 10.1002/mde.1280 Published by Wiley-Blackwell (September 2006). The definitive version is available at www.onlinelibrary.wiley.com.